Solve the following : A company decides to set aside a certain amount at the end of every year to create a sinking fund that should amount to ₹9,28,200 in 4 years at 10% - Mathematics and Statistics

Sum

Solve the following :

A company decides to set aside a certain amount at the end of every year to create a sinking fund that should amount to ₹9,28,200 in 4 years at 10% p.a. Find the amount to be set aside every year. [(1.1)4 = 1.4641]

Solution

Given, A = ₹9,28,200, n = 4 years, r = 10% p.a, i = "r"/(100) = (10)/(100) = 0.1

Now, A = "C"/"i"[(1 + "i")^"n" - 1]

∴ 9,28,200 = "C"/(0.1)[(1 + 0.1)^4 - 1]

∴ 9,28,200 x 0.1 = C[(1.1)4 – 1]
∴ 92,820 = C[1.4641 – 1]
∴ 92,820 = C(0.4641)
∴ C = (92,820)/(0.4641)
∴ C = ₹2,00,000
∴ The amount to be set aside each year is ₹2,00,000.

Concept: Annuity
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APPEARS IN

Balbharati Mathematics and Statistics 2 (Commerce) 12th Standard HSC Maharashtra State Board
Chapter 2 Insurance and Annuity
Miscellaneous Exercise 2 | Q 4.21 | Page 32
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